Former PM Paul Keating has been acquitted of driving through a red traffic light, with a magistrate finding there was "reasonable doubt" about the allegation.

Keating beats traffic infringement

Paul Keating says he's chalked one up for the battler who's been wrongly booked.

A magistrate has dismissed a traffic infringement against the former prime minister, who denied running a red light on Australia Day.

Mr Keating in July had pleaded not guilty to the alleged offence and on Tuesday in court successfully fought a potential $338 penalty.

The 66-year-old welcomed the outcome, saying it was important for people to understand such cases can be challenged.

"I think it's important that ordinary people in the community, having received an infringement notice for an offence they didn't commit, basically understand that the system is not loaded against them," Mr Keating said outside Downing Centre Local Court in Sydney.

"They're entitled to have the courage of their convictions and I hope some social good will flow from today's outcome.

"You can't have someone tell you you did something you didn't do; there's got to be some moral clarity about the way we live our lives."

On January 26 of this year, the Labor stalwart was driving his daughter's green Peugeot car from his Potts Point home in Sydney's inner east to visit his mother in the city.

The 66-year-old was diverted from his usual route because roads were closed for Australia Day celebrations throughout the city area.

Mr Keating told Sydney's Downing Centre Local Court that traffic on the day was "bumper-to-bumper" and admitted to using a bus lane to "shuffle" past cars.

Before 1pm, at the intersection of Pitt and Park streets, police officers Leading Senior Constable Chad Ansted and Constable Andrew Brooks were coming to a stop at a yellow light in their fully-marked police car.

"At the same time I heard an engine noise, an increasing engine noise," said Const Ansted, who then turned toward the noise to see a green Peugeot hatchback.

"As the engine noise increased I again looked at the traffic control signals and the light was red."

Police stopped Mr Keating a short time later, and he denied the light had been red.

"The light was yellow, not a doubt in the world," Mr Keating said when he took the witness stand in the court.

In recapping the evidence from both police officers and Mr Keating, Magistrate Carolyn Barkell accepted that on the day in question traffic in the city was heavy.

"I must find reasonable doubt. I dismiss the allegation," she said.

After being stopped by police Mr Keating made notes of the events on old bank statements and Medicare forms, which he found in the car.

Mr Keating said he thought police had stopped him for driving in the bus lane and that after he debated the traffic light issue with Const Ansted he was surprised to be given a "red" light infringement.

Police had submitted that Mr Keating was in a hurry and impatient on the day of the offence.

The former prime minister denied the claims.

"He insisted then as he insists now that it was not red, it was yellow ... and that he should have been able to shuffle through the intersection to the other side," Mr Keating's lawyer Sam Macedone told the court.